Prior literature suggests that voluntary disclosures of forward-looking information tend to lead to capital market benefits, but these disclosures may also result in negative capital market consequences if subsequent performance falls below expectations. We therefore hypothesize that convex...

We examine whether proxy advisory firms (PAs) serve primarily an information intermediary role by providing research and voting recommendations to shareholders, or directly influence executive compensation by exerting pressure on firms to adopt preferred pay practices. Through a field study, we...

This paper examines whether and for how long managers' initial assessments of employee ability influence promotion decisions. Using archival data from minor league professional baseball, we find that, controlling for performance, initial assessments are associated with promotion decisions for at...

This paper examines how and when CEO debt-like compensation (i.e., “inside debt”) affects debt contracting terms and corporate investment levels. We find a negative relation between inside debt and both R&D and capital expenditures for firms with low financing constraints, but this...

We conduct an interview-based field study to investigate how directors provide cybersecurity oversight and the role of expertise in determining its effectiveness. Our interviews suggest that directors’ cybersecurity expertise is an important determinant of oversight effectiveness, primarily...

We use observed insider trading data to estimate the start and end points of quarterly open trading windows, and find that voluntary insider trading restrictions reflect concerns about information asymmetry, the strength of external monitoring, and executives’ liquidity needs. We also identify...

Given CEOs' substantial equity portfolios, much recent literature on CEO incentives regards cash-based bonus plans as largely irrelevant, begging the question of why nearly all CEO compensation plans include such bonuses. We develop a new measure of bonus plan incentives, and document that...

We examine how constraints on directors' availability to serve on boards influence their labor market outcomes. We find that directors who lose (or leave) a board are more likely to subsequently gain a new board seat, regardless of their performance on the departed board, suggesting that...

We investigate whether the mix of financial covenants in debt contracts allows lenders to screen borrowers based on their private information about their future risk-taking intentions. Consistent with adverse selection theories, we predict and find that borrowers with greater risk-taking...

I examine the relation between shareholder value and managerial risk-taking and how this value-risk tradeoff influences managers' incentive compensation packages. I find that shareholder value increases with risk and therefore managerial risk aversion creates potential agency conflicts between...